1. LOCATION LOCATION

It’s a real estate cliché because it’s true and when it comes to holding value under pressure of downward prices, it matters the most.

Rarity, scarceness and low supply are factors that play into the value of a home, and when demand for a scarce resource is stronger than its supply, the price will be maintained or even increase.

Houses are replaceable – you can always build a new one – but the land underneath is not.

If your home is in a spot everyone else wants, it is likely to have stronger demand and sell more quickly than similar homes in locations that aren’t as popular.

2. THE UNIQUE STREAK

Unlike stocks and shares, every house has its own quirks, qualities and features that make it different to the house next door.

Even in greenfield suburbs where every house has been built by the same builder to a similar floorplan, there are differences in the garden, aspect and decoration that will appeal to different buyers.

Unique qualities such as having a large land size, gorgeous views, waterfrontage or a character home ensure that value will remain higher than more generic housing available next door.

A buyer is always able to pay that little bit more for a house with a quality they simply cannot attain in a similar, nearby property – even in times of market downturn.

3. INFRASTRUCTURE IMPETUS

Not all suburbs are created equal. The surrounding development, streetscape, facilities, transport, shops and schools in suburbs can be collectively known as “infrastructure” and add immeasurably to a home’s value.

A property within five-minute’s walk of a bus or train link to the city, a 10-minute walk to a quality school and close to good medical and shopping facilities will always be worth more than a house in a suburb that is miles from the nearest shop and a half-hour drive to a good school.

Properties close to quality roads, transport links, workplaces, medical facilities and schools retain a higher value than those that are more remote.

Suburbs close to infrastructure that is not yet built – such as a planned new hospital or highway – tend to improve in value around the time of the announcement of the new projects and again when they are complete.

4. RENOVATE RIGHT

A falling housing market is not the time to renovate and add value. In fact, most experts suggest holding on to your renovation dollars unless you really need to create more space and the building costs are cheaper than the transaction costs of moving house.

Improving a home's energy efficiency promises a lower cost of upkeep, so buyers pay attention. And right now, the Federal Government is giving away a raft of freebies to encourage us all to do it.

There is free home insulation on offer (link to http://www.environment.gov.au/energyefficiency/insulation/), as well as interest-free green loans (insert link to http://www.environment.gov.au/greenloans/index.html) of up to $10,000 for improvements that lower the water use and energy consumption of a home. Check out http://www.environment.gov.au/rebates/ for more details on rebates.

On the other hand, highly personal renovations such as lavish kitchen upgrades, swimming pools or home theatres may even detract from a home's price if few buyers share your tastes. A new owner may see your swimming pool as a liability that must be torn out at great expense.

5. PICKING CYCLES

Most property experts agree the top end of the property market is suffering more than the lower end, which is being fuelled by record low interest rates and first home buyer grants.

Real estate predictions by BIS Shrapnel and mortgage insurer QBE say rising rents in most capital cities will underpin property values so Australia shouldn’t see the price falls of up to 40 per cent that have occurred in the United States or Britain.

Other experts are not so sure, and say that some capital cities could have stagnant property prices, which means they fall in value in real terms.

“If prices remain the same for eight years, after inflation and economic growth you would see that the real decline in price is 40 per cent,” says Rismark International economist Dr Matthew Hardman.

Every suburb and property will respond differently to market forces. Once you own your home, there is very little you can do if the market delivers a hit to your property value. Simply hold tight and realise the market always operates in cycles.

Simply wait until the cycle swings back to stability, and any value drop shouldn’t matter a jot. After all, buying a new home and selling the old one in the same market conditions should deliver the same bottom line result, regardless of whether that overall market is booming or busting.

And isn’t it easier to understand that markets move up and down in the same market conditions should deliver exactly the same upside or downside regardl

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